(期初存货)

(期初存货) Principles of Accounts Unit 8 UNIT 8: TRADING AND PROFIT AND LOSS ACCOUNTS: AN INTRODUCTION The main reason for keeping financial records is to calculate the profit or loss of the firm. Terminology a. Opening stock (期初存貨) -- the goods unsold at the beginning of the financial year. b. Closing stock (期末存貨) -- goods unsold at the end of the financial year. c. Cost of Goods Sold (銷售成本) -- (Opening Stock + Purchases - Closing Stock) d. Gross Profit (毛利) -- (Sales - Cost of Goods Sold) > 0 e. Gross Loss (毛損 ) -- (Sales - Cost of Goods Sold) < 0 f. Net Profit (純利) -- (Gross Profit - Expenses + Incomes) > 0 g. Net Loss (純損) -- (Gross Profit/Loss - Expenses + Incomes) < 0 Final Accounts 1. Trading and Profit and Loss Account -- an account showing the profit or loss for the current financial year. It forms part of the `double entry`. a. Trading Account -- showing Gross Profit or Loss b. Profit and Loss Account -- showing Net Profit / Loss 2. Balance Sheet -- a statement showing the assets, capital and liabilities of the firm at a particular date. It does not form part of the `double entry`. Illustration 1 A. Au Trial Balance as at 31 Dec., 1997 Debit Credit $ $ Purchases 4,350 Sales 9,510 Capital 6,980 Drawings 1,000 Machinery 4,820 Bank 3,870 Cash 500 F. Fung 980 H. Ho 400 AB Ltd. 3,430 Rental expenses 2,000 Salaries 3,000 Interest income 200 20,520 20,520 We assume that all goods purchased were sold by 31 December 1997, leaving no stock at that date. 1 Principles of Accounts Unit 8 Purchases 1997 $ 1997 $ Dec31 Bal b/d 4,350 Sales 1997 $ 1997 $ Dec 31 Bal b/d 9,510 Rental expenses 1997 $ 1997 $ Dec31 Bal b/d 2,000 Salaries 1997 $ 1997 $ Dec31 Bal b/d 3,000 Interest Income 1997 $ 1997 $ Dec31 Bal b/d 200 Capital 1997 $ 1997 $ Dec31 Bal b/d 6,980 A. Au Trading and Profit and Loss Account for the year ended 31 Dec., 1997 $ $ 2 Principles of Accounts Unit 8 Stock of Unsold Goods at the end of the year Usually some of the goods bought have not been sold by the end of the accounting period. If this is the case, Cost of Good Sold will become: What we bought in the period: Purchases Less Goods bought but not sold in the period: - Closing Stock = Cost of Goods Sold Illustration 2 C. Chan Trial Balance as at 31 March, 1998 Debit Credit $ $ Purchases 5,650 Sales 12,160 Capital 7,000 Drawings 500 Machinery 3,700 Bank 4,000 Cash 200 Debtors 2,100 Creditors 1,130 General expenses 1,340 Salaries 540 Rent 3,200 Lighting 230 Commission income 1,170 21,460 21,460 Note: On 31 March 1998, C.Chan had goods costing $400 which were unsold. C. Chan Trading and Profit and Loss Account for the year ended 31 March, 1998 $ $ 3 Principles of Accounts Unit 8 4 Principles of Accounts Unit 8 Stock 1998 $ 1998 $ Capital 1998 $ 1998 $ Mar 1 Bal b/d 7,000 Drawings 19-7 $ 19-7 $ Dec31 Bal b/d 500 Notes: 1. Accounts closed after the preparation of Trading and Profit and Loss account: a. Transferred to trading account -- Sales -- Purchases b. Transferred to profit and loss account -- General expenses -- Salaries -- Rent -- Lighting -- Commission income c. Transferred to capital account -- Drawings 2. Accounts NOT closed after the preparation of Trading and Profit and Loss account: -- -- -- -- -- -- 5 Principles of Accounts Unit 8 6